On Friday, Finance Minister Nirmala Sitharaman proposed to lower personal direct tax in today's budget speech.
"In order to provide significant relief to individual taxpayers and to simplify the income tax law, I propose to introduce a new personal income tax regime where rates will be significantly reduced for the individual taxpayer who forego certain exemptions. New income tax rate regime is optional," said FM Nirmala Sitharaman.
"Under the new regime, an individual will be required to pay tax at a reduced rate of 10% between income of Rs 5-7.5 lakh, down from the previous 20 percent. 15 per cent tax for 7.5 lakh to Rs 10 lakh income. 25% tax for income between 12.5 lakh to 15 lakh and 30% tax for income above 15 lakh," FM Sitharaman announced in the Budget presentation today.
New Personal Income Tax Regime:
Rs 0 to Rs 2.5 lakh: Expemted
Rs 2.5 to Rs 5 lakh – Is 5%
Rs 5 to 7.5 lakh – Decreased to 10% from 20%
Rs 7.5 to 10 lakh – Decreased to 15% from 20%
Rs 10 to 12.5 lakh – Decreased to 20% from 30%
Rs 12.5 to Rs 15 lakh – Decreased to 25% from 30%
This is the second budget for Sitharaman, who became the second woman finance minister after Indira Gandhi to do so in the history of independent India. The Finance Minister on Friday tabled in Parliament the pre-Budget Economic Survey for 2019-20, which projected the state of the economy and outlined its challenges. The survey was released by Chief Economic Adviser Krishnamurthy Subramanian.
The Union Budget is the financial statement of the government, detailing its revenue and expenditure in the past, as well as estimated spending and projections for the coming year. Sitharaman had presented her maiden budget in July last year, shortly after the BJP-led government came back to power in the Centre in the 2019 Lok Sabha elections.
Till 2016, the Union Budget was presented on the last working day of February. Former finance minister Arun Jaitley had changed the tradition in 2017 when the Union Budget was presented on February 1.